Remittance giant Western Union is piloting a stablecoin-based settlement system to power its treasury operations and modernize how it moves money across borders.
Summary
- Western Union is testing a stablecoin-based settlement system to improve speed, transparency, and cost efficiency in cross-border transactions.
- CEO Devin McGranahan said the company is exploring on-ramp and off-ramp partnerships to connect traditional finance with digital assets.
- The move follows the passage of the GENIUS Act, which has encouraged traditional institutions to explore stablecoins.
During a recent earnings call, Debin McGranahan, Wester Union’s CEO, revealed that the firm is “actively testing stablecoin-enabled solutions,” which would allow it to “reduce dependency on legacy correspondent banking systems, shorten settlement windows and improve capital efficiency.”
With stablecoins, Western Union hopes to “move money faster with greater transparency and at lower cost” to better serve its over 150 million customers, without compromising on compliance or customer trust, McGranahan said.
“Historically, Western Union has taken a cautious stance towards crypto, driven by concerns around volatility, regulatory uncertainty, and customer protection. However, with the passage of the GENIUS Act, we are now seeing potentially interesting opportunities to integrate digital assets into our business,” he added.
U.S. President Donald Trump signed the GENIUS Act in July this year to formalize a regulatory framework for stablecoin issuers, thereby opening the door for traditional financial institutions to safely engage with DeFi. Since its passing, many traditional players like Mastercard have shown interest in using stablecoins for settlement and payments.
Outside its treasury operations, Western Union is exploring plans to use its global network as an on-ramp and off-ramp for digital assets. McGranahan said the company was “seeing strong interest” from potential digital-native partners who want to leverage its infrastructure to bridge traditional finance with the crypto economy, particularly across regions where traditional banking is limited.
Lastly, Western Union is working on enhancing its capabilities by expanding partnerships to allow customers to hold and transfer stablecoins.
Western Union’s interest in crypto
The latest disclosure comes as no surprise, as the 175-year-old institution has long shown keen interest in the crypto space despite its cautious stance.
Western Union ran pilot programs using Ripple’s blockchain and the XRP token for cross-border payments as early as 2015, and again in 2021. In 2022, the company filed multiple trademarks for various crypto-oriented services.
Earlier this year, McGranahan said the company views stablecoin as an opportunity and that the company was looking to make stablecoin-to-fiat settlement services available across regions like Latin America and Africa.
Western Union competitors like MoneyGram and PayPal have already moved ahead with their own stablecoin initiatives. MoneyGram recently launched instant USDC remittances in Colombia through a partnership with Crossmint, while PayPal rolled out its PYUSD stablecoin to facilitate faster payments and transfers within its ecosystem.
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Source: https://crypto.news/western-union-pilots-stablecoin-settlement-system-to-modernize-remittances/
